While stress levels in structured credit departments are off the charts, corporate lending desks seem fairly chilled. They appear to be parcelling out loans to good companies in large amounts, and at pretty ordinary prices. According to Loan Radar, a news and data provider, western European investment-grade companies have signed off on more than €35bn of loans so far this year; down 40 per cent from €58bn in the same period last year but still a big number. Data on pricing is patchy but typical spreads are up by about 15 to 30 basis points for a BBB borrower. That is nothing like as harsh as the 100bp rise over the same period implied by the benchmark iTraxx Europe index, which tracks the cost of insuring bonds of roughly similar quality.

The loans’ price tags may not tell the whole story, however. Although the headline interest rates on new bank deals seem attractive to borrowers, neither side discloses the slew of upfront charges (mysterious “liquidity fees” are now common), or the strings attached. Banks have always queued up to lend at generous rates on the understanding they might later win lucrative business, such as underwriting bonds or running an interest rate swap programme. But those vague promises are now becoming explicit – nods and winks are no longer enough to satisfy the banks. Corporate treasurers say that lenders are also tightening covenants for gearing and interest cover ratios.